Manchester University recently lost to an Oxford college in a hard-fought final of University Challenge, but there was a silver lining; the result was overturned after one of the Oxford ‘students’ was discovered to be a trainee accountant. The city’s legal market is experiencing equally mixed fortunes. Like everywhere else Greater Manchester has been hit by the recession, but law firms are making the most of the situation – and the city continues to welcome new arrivals.
In the north-west region, 53% of an estimated 18,200 manufacturing businesses plan to cut staff in 2009, according to a recent survey by the Manufacturing Institute. So it is no surprise that the legal sector is suffering too. Some of the city’s most famous legal names, such as Halliwells, and other big-name firms who have Manchester offices, such as DLA Piper, have had to make redundancies (up to a reported 30 at Halliwells alone).
But in keeping with its entrepreneurial commercial history, other firms in the city have introduced alternatives to redundancy. At Cobbetts, although there have been a number of redundancies, a four-day week has been introduced for fee-earners.
Michael Shaw, managing partner at Cobbetts, explains the move thus: ‘We are reasonably confident that we can manage our way through the recession by adopting flexible working arrangements with staff. These may include part-time working, secondments or sabbaticals, so as to preserve the talent we have nurtured and assembled within the firm.’
National firm Beachcroft has avoided cutting back on numbers by redeploying five staff in Manchester (fee-earners and support) from real estate to other practice areas. Robert Moss, regional senior partner, says: ‘It has been very successful, actually. Staff affected have embraced the new challenge and we think they will be better lawyers for gaining experience in different areas.’ These arrangements have longer-term benefits too: firms will not have the burden and cost of recruitment when the green shoots of economic recovery finally begin to show through.
Some Manchester firms are protected from the worst of the downturn because of the nature of their practices – many of the insurance and litigation-based firms could be called fairly ‘recession-proof’. Nick Peel, regional Manchester office head at Weightmans – the firm which represents the insurance services arm of one of the commercial icons of Manchester, the Co-op – says he has seen little impact on the volume of instructions, because the main area affected by the downturn, commercial property, ‘has a relatively small presence in Manchester for us, so the impact for the firm overall is felt less’.
Similarly, firms with a broad portfolio of services are faring better. Richard Glitheroe, finance partner at Pannone, says that because his firm is full-service, with 12 different business streams, ‘we are not subject to the same fluctuations in income and profitability as those firms entirely dependent on commercial and business clients’. Or, as Peel presciently put it to the Manchester Evening News last year: ‘Firms with a balanced portfolio of clients and specialisms will be better-equipped to remain profitable’.
Particular departments within firms are actually prospering, as Stephen Robinson, employment partner at Davies Arnold Cooper in Manchester, explains. The firm is ‘extremely busy’. In fact, it is ‘the busiest time for employment work in the last 15 years’. It is for this reason that Beachcroft has redeployed staff to its employment practice.
It is a similar story in respect of both commercial litigation, which has seen a proliferation of recession-related disputes, according to Moss, and also debt recovery, as Katharine Mellor, a corporate partner at DWF and board member of Pro-Manchester, the professional services networking organisation, explains: ‘Fee-earners doing straightforward debt recovery are very busy,’ she says. ‘Businesses want to get the money in if they can.’
Recruiters tell the same story – there is an impact from the downturn, but some areas are seeing a boost, according to John Sacco at Sacco Mann: ‘It is noteworthy that a number of corporate departments remain busy – the market for £20m deals and under seems to have been much less affected than the big-ticket deals. Litigators are not idle and employment lawyers are really busy.’
Overall the picture is patchy. ‘The business recovery and insolvency practice areas are busy, but perhaps not as busy as people expected,’ says Mellor. ‘This is, in part, because there is not the level of enforced sales by lenders because the property market is so poor.’
Peel observes: ‘The recession has affected all of us, as it is about how quickly you can say you’ll get paid.’
Glitheroe agrees that firms must watch their finances carefully: ‘Firms that are not managing their finances efficiently will come under significant pressure as the days of easy access to borrowings are long gone. Banks are being careful about the levels of funding they provide and, as clients delay payments of fees, or in extreme cases go out of business, strains on working capital will increase.’ Peel also points out that hourly rates are static, which in turn squeezes margins.
Some argue that a regional city is better off in a recession than London, and Mellor supports this view: ‘Manchester may fare better than London, as it is less highly geared for the big transactions than the big City firms with vast teams to do them. In that respect, London will do worse than the regions. Owner-managed businesses will be less up and down.’
But this has not necessarily been true of the regions to date, and many firms in the UK’s regional cities were some of the first to make redundancies, as Shaw explains: ‘We suspect that the recession began to be felt by corporate law firms in the regions earlier than by those in the City, prompting a need for early action in terms of redundancy programmes.’
Future projectsDespite this, Greater Manchester does have better prospects than other cities, with significant new projects delivering over the next few years. As part of the government’s attempts to bring cost efficiencies to the Civil Service by farming out more jobs to the regions, the Training and Development Agency for Schools is to move to the city from April.
There is also the much-touted MediaCityUK, a 200-acre site for media businesses with a public plaza twice the size of Trafalgar Square. This will host five major BBC operations (including BBC Sport and Radio 5 Live) at Salford Quays from 2011. The Quays, touted as the ‘Canary Wharf for the North’, is only a 15-minute journey from the city centre by Metrolink, the city’s tram network.
Also set to open is the new administrative court on the panoramic 12th floor of the recently completed Civil Justice Centre. Court-based work will continue to grow and develop away from London and towards Manchester. Beachcroft, for example, has been instructed in a dispute which will go to the Court of Appeal this autumn – except that, in this case, the Court of Appeal will get on the train, and will sit in Manchester and not London.
Another significant infrastructural development will see Manchester City Council regenerate the civic centre at a cost of £165m, overhauling places such as the Town Hall, the Central Library and St Peter’s Square.
The city has continued to attract new entrants in spite of the economic gloom. National firm Shoosmiths arrived in January. Mathys & Squire, the highly regarded trademark and patent attorneys, responsible for advising on the intellectual property of brands such as Chelsea Football Club and Harley Davidson, opened an office on Fountain Street last November.
Robert Hawley, Mathys & Squires partner, is optimistic about opening for business in a downturn. ‘A lot of patent work is sheltered in an economic downturn,’ he says, ‘because patents derive from long-term research and development commitments.’ The firm currently represents the BBC and hopes to build on that work when the BBC’s outlets in MediaCityUK finally open.
Niche marketManchester also hosts niche areas that will continue to chart their own course during the recession. Firms in Manchester and the north-west have grown reputations in areas such as child law, and, in particular, running child abuse cases.
North-west firm Abney Garsden McDonald has the largest specialist child abuse compensation department in the country (18 people). It is about to launch what the firm says may be the largest group action for alleged abuse so far, following on from group litigation a couple of years ago against Manchester City Council, where 168 abuse survivors secured more than £2m in compensation. This group action may obtain even greater damages following a change in the law 2008 allowing for aggravated, exemplary and/or punitive damages.
Abney Garsden McDonald partner Peter Garsden, who is running the group action, is also president of the Association of Child Abuse Lawyers. He says the region’s expertise in this difficult area of personal injury law has developed out of the needs of the community. ‘There were a series of police investigations in the late 1990s and into the 2000s of children’s homes (66 in Manchester) which exposed these abuses.’
Tony Broadley, joint managing partner and head of childcare at Rowlands, agrees that the city is a special case. ‘Manchester has long been seen as a centre of excellence for child abuse cases. Due to the arrangement of the court system and the geography of the area, many cases from the surrounding conurbations are brought to Manchester to be heard and many of the changes to practice guidelines have emanated from the city’s judiciary and practitioners.’ Perhaps it is in recognition of this expertise that Manchester Metropolitan University is running the UK’s first BA in Abuse Studies.
For different reasons, child law is facing its own challenges, not as a result of the recession but due to changes in legal aid, as Broadley explains: ‘Fees paid to law firms undertaking family legal aid work are currently under consultation with the LSC with a view to being cut significantly. This could have a further impact on the handling of child abuse cases and, as Manchester is a centre of excellence, should be a concern for the legal system in the city.’
Another niche area is education. Some firms in the city have come to develop expertise in representing educational establishments, perhaps because of the large number of colleges and universities in the Manchester area.
DWF, for example, has brought together different specialists to run its education team, exploiting the expertise built up from serving a longstanding client, Liverpool’s John Moores University. Following a concerted effort to pitch in this area, they now represent Manchester College, the result of a merger between Manchester City College and MANCAT, which, the firm says, is now the biggest college in the UK.
DWF, along with other north-west and national firms, has also been appointed to provide legal services to a number of education colleges through the Crescent Purchasing Consortium. Maria Burquest, a commercial litigation partner at DWF and head of its education team, says her team now has 19 partners who deal with matters as wide-ranging as employment, property, joint ventures and licensing, as well as governance issues such as student appeals.
Winners and losersDespite these positive messages, it is certainly true that, on a more personal level, some of Manchester’s private practice lawyers are feeling uncertain about their jobs. This is borne out by the fact that there is far less fluidity in the private practice recruitment market, as Hannah Cotton, group director of Sellick Partnership, the legal recruitment specialists, explains: ‘Unless they have been made redundant, people are just not moving at the moment. They are preferring to stay put. At the more senior level, they are only being taken on if they are bringing clients with them.’
However, adding weight to the argument that there are winners as well as losers out there, Cotton says the public sector is busy: ‘A lot of people within the public sector are moving out of London into the north-west. Legal teams are moving up here as there is more space, with a cheaper workforce. Also, new tramlines are reaching out to places such as Oldham which mean that people can live in [outlying] areas and still work in the city.’
Interestingly, however, private practice lawyers do not appear inclined to move from the private to the public sphere, even as the recession bites. ‘There are a few people moving but not as many as you would expect – it’s a big change to do that,’ says Cotton. ‘You need to "upskill" yourself about the wheels of government and it doesn’t suit everybody.’
Looking ahead to the rest of the year, Mellor says the legal sector is like the ‘curate’s egg’. For some firms, business may get worse before it gets better, as Mellor says: ‘The next 12 months may be tougher than the last 12.’ But Tim Newns, director of business development at MIDAS, Manchester’s inward investment agency, remains upbeat: ‘The sector is changing with the economy, of course, but we are still seeing growth. In serving the UK outside London, Manchester is the place to be.’
- For the latest job vacancies in Manchester and other regions, see our recruitment section
No tube problems and better football teams
Beachcroft associate Elizabeth Wallace tells it like it is: ‘Manchester is a great place socially and culturally. There’s a lower cost of living, even trainee solicitors can get on the property ladder, there’s no such thing as Tube problems – and much better football teams’.
Gemma Sowerby, a solicitor at Weightmans, wholeheartedly agrees. ‘Manchester has developed a lot over the last couple of years and it is now a cosmopolitan environment with an excellent social scene, top-class restaurants, with a vibrant city centre. With Manchester being a smaller city than London, there is a feeling of being at the heart of the city's business culture. Manchester has London's ‘big city’ feel but is still a friendly city.’
James Brown, a family lawyer at Pannone, was concerned about not losing out on the quality of work when he decided to relocate from London: ‘I had really enjoyed working at a top-rated firm and it was important to me not to have to compromise on the standard of work I was doing. The family law department at Pannone is as good as (and in a lot of cases larger than) the various top-rated family teams in London.’
A word of warning, however, from James Thackray in the litigation department at Pannone – beware the very early start required if your case is listed for a morning court hearing in London. But in all other respects, Manchester appears to provide a good work-life balance. As Debbie Jones, also at Pannone, says: ‘You really can have your Eccles cake and eat it.’
College of Law new admission
The College of Law will be the only legal training provider based in the heart of Manchester. This is deliberate, as Tricia Chatterton, regional director for the college, explains: ‘We know how important it is for our students to have access to law firms and vice versa. This reflects the way training is going, with more close ties being forged at the GDL/LPC stage. Firms can arrange to see their own students.’
This central location, near transport links with the Greater Manchester region, is also indicative of the way students tend to live at home as they can no longer afford to move away to study – to the College of Law’s York or Chester campuses, for instance. ‘Put simply, we are responding to market need in the area’, says Chatterton. The only problem for the students is that, according to a skills report by Pro-Manchester from October 2008, there is an oversupply of graduates, and competition for training contracts is therefore fierce.Polly Botsford is a freelance journalist
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